The selling pressure in USD/JPY is expected to alleviate once the pair surpasses the 135.10 level, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we expected USD to trade in a range between 132.70 and 134.50. USD subsequently dipped to 133.02 before rebounding to 134.89. We view the price actions as part of a broad consolidation and expect USD trade between 133.50 and 135.00 today.”

Next 1-3 weeks: “We highlighted yesterday (14 Mar, spot at 133.20) that the sharp increase in downward momentum is likely to lead to further USD weakness. We added, a breach of 135.10 (‘strong resistance’ level) would indicate that USD is not weakening further. In NY trade, USD rebounded to 134.89. While downward pressure has waned somewhat, only a breach of 135.10 would invalidate our view.”